On June 21, 2018, the U.S. Supreme Court overturned the requirement that remote sellers must have a physical presence in a state in order to be required to collect that state’s Sales Tax (South Dakota v. Wayfair) (Wayfair). A remote seller is one who sells tangible personal property, specified digital products, or taxable services for delivery into a state via the Internet, catalog, or telephone, and has no physical presence in that state. As a result of the Wayfair decision, states may now impose Sales Tax collection and remittance obligations on remote sellers.
Sellers that have a physical presence in New Jersey, or who are otherwise legally obligated to collect and remit New Jersey Sales Tax, are unaffected by the new law.
Consistent with Wayfair, legislation was enacted that requires certain remote sellers to collect and remit New Jersey Sales Tax. For sales made on and after November 1, 2018, a remote seller that makes a retail sale of tangible personal property, specified digital products, or taxable services delivered into New Jersey must register, collect, and remit New Jersey Sales Tax if the remote seller meets either of the following criteria (the economic threshold):
A remote seller that does not meet either of these criteria does not have to register with the Division of Revenue and Enterprise Services to collect and remit New Jersey Sales Tax.
Remote sellers are not required to collect and remit Sales Tax on the sale of tangible personal property, specified digital products, or taxable services delivered into New Jersey when sold through a marketplace, because the new law requires the marketplace facilitator to collect and remit Sales Tax on all marketplace transactions. The marketplace is required to collect and remit tax, regardless of whether the marketplace seller is above or below either of the economic thresholds. For additional information on Sales Though a Marketplace, see Technical Bulletin 83.
Marketplace Facilitators Request for Delay of Collection and Reporting Requirements
We may temporarily suspend or delay the registration, collection, and remittance obligations of a marketplace facilitator for a period not to exceed 180 days with a written request. See Technical Bulletin 83 for guidance.
Beginning November 1, 2018, a remote seller that is above one or both of the above thresholds should go to the Division of Revenue and Enterprise Services website and choose the option “Register as Remote Seller Only.” Alternatively, since New Jersey is a full member of the Streamlined Sales and Use Tax Governing Board, a remote seller may register for Streamlined member states by completing one online application through the Streamlined Sales Tax Registration System. Once registered, the remote seller will receive a letter containing filing and payment information.
A remote seller that is over the economic threshold, but sells solely through one or more marketplaces must register, but may request to be placed on a non-reporting basis for Sales Tax, since the marketplace is required to collect the tax on all marketplace transactions.
A remote seller that is over the economic threshold, but only makes nontaxable sales must register, but may request to be placed on a non-reporting basis for Sales Tax.
In order to be placed on a non-reporting basis for Sales Tax purposes, Form C-6205-ST, Request to Be Placed on a Non-Reporting Basis, must be completed and mailed to the Division of Revenue and Enterprise Services.
The Division has several Sales Tax publications, the New Jersey Sales Tax Guide (S&U-4) will be helpful in identifying the taxability of many products and services.